2017 edexcel economics paper 1 microeconomics paper · 2017 edexcel economics paper 1...

2017 Edexcel Economics Paper 1 Microeconomics Paper

Model Answers

The following outstanding candidate responses are published in the Edexcel exam board's Examiners' Report. Please note these responses are for reference study only, and Qurious Education Ltd. does not claim any copyright to the materials Pearson Education publishes. We only extracted them for educational purposes and to make their public resources more accessible. Please visit their website for the full version of the Examiners' Report.

This document is helpful for longer essay questions/responses. Please reference the Mark Scheme for answers to Multiple Choice questions.

Examiners’ ReportJune 2017

GCE Economics A 9EC0 01

6 GCE Economics A 9EC0 01

Question 1 (a)This is a Theme 1 question and a number of responses only stated the equilibrium price and not the quantity as requested. Candidates need to practice completing such tables as part of their exam preparation.

This answer achieves a mark of 4/4.The candidate accurately inserts the data in the last two columns and has calculated the correct equilibrium price (£24) and quantity (9,000).

Examiner Comments

7GCE Economics A 9EC0 01

This answer achieves a mark of 4/4.

The columns alone would score zero as the measure per month is (000) making the quantity at £24 being 9,000,000. The answer does achieve full marks for going on to identify the new equilibrium as £24 and 9,000.

Examiner Comments


Ensure you are careful with the unit of measure.

Examiner Tip


Question 2 (a)Another Theme 1 question. In this question it was clear who knew their PED formula and who did not. Candidates need to practice such key calculations as part of their exam preparation.


This candidate has got the correct answer of 1.2, a minus or plus sign is allowed.

Examiner Comments

Some margin for rounding up/down is allowed on mark schemes but do try to be as accurate as you can with calculations.

Examiner Tip


Question 2 (b)In this question it was clear who knew how to calculate revenue and who did not. A number of candidates lost a mark as 'million' was missing from their answer as the unit of measure.


This candidate achieves full marks for providing the correct answer, being £53.9 million.

Examiner Comments

Always ensure you state the correct unit of measurement.

Examiner Tip


Question 3 (a)In this question it was clear who knew how to calculate subsidy and who did not. A number of candidates lost a mark as 'million' was missing from their answer as the unit of measure. Candidates need to practice similar subsidy and tax diagrams from Theme 1.



This candidate achieves full marks for providing the correct answer, being 1,022,400,000.

Examiner Comments

Best practice is always to state the currency.

Examiner Tip


Question 3 (b)Most candidates achieved full marks but a significant number of candidates lost a mark as the answers were transposed incorrectly i.e. they identified consumers as receiving 87.55 and producers 12.5%. Candidates need to practice similar subsidy and tax diagrams from Theme 1.



Full marks for correctly identifying 12.5% for consumers and 87.5% for producers. Without the correct answers being provided only one mark would have been awarded for correct annotation of diagram.

Examiner Comments


Question 4 (a)This was a straightforward question from Theme 3 that required candidates to fully annotate carefully and correctly. One issue that some candidates faced was incomplete labelling and not carefully identifying the smaller profit/loss box.

Remember diagrams are an effective way to concisely apply economic theory.

Examiner Tip


Full marks are awarded for a fully labelled cost and revenue diagram carefully annotating the fall in profits.

Examiner Comments


Question 5 (b)Most candidates were able to clearly define these terms. The main problem when not awarded a mark was a failure to link to output.


This is a full answer identifying the difference related to output (2/2) but also providing examples.

Examiner Comments


Question 5 (c)Most candidates were able to calculate correctly. The main problem was a failure to indicate the answer as a unit that clearly could be interpreted in pence between 29 and 30.


A clear answer is provided.

Examiner Comments

It is always advisable to show your working in case of a computational error.

Examiner Tip



The candidate starts by calculating the four firm concentration ratio for both years thereby picking up 2 marks for analysis and one for implicit knowledge of concentration ratio. They then go on to provide and explain the reason for the change.

Examiner Comments

Question 6 (a)


Question 6 (b)This question demonstrates the importance of candidates carefully reading the question and making sure they understand precisely what is being asked of them. Far too many candidates failed to focus on food suppliers and consumers. Also key with this question was understanding the concept of monopsony, bearing in mind this was in the context of supermarket monopsony power. Low scoring responses either did not understand monopsony or confused it with monopoly and did not go beyond quoting the data. Whilst many candidates were able to use the extracts and data effectively, linking the information provided to specific economic theories would have yielded better rewards. (Dis)economies of scale were generally recognised but a failure to develop answers by referring to specific types weakened a number of arguments. However overall, candidates did well with this item achieving a mean mark of 7.73.



It achieves Level 3+ (8/8) and Level 2 EV (4e/4e). All reasons are relevant, explained and applied to the context rather than generic.

To get to Level 3 on KAA the candidate has a clear understanding of monopsony, has done both consumers and food suppliers, has applied to the case (and also concentrated on the ‘impacts’). Weaker responses focussed on the ‘cause’ rather than impacts.

Examiner Comments

Read the question carefully to ensure you meet the full demand of the question and focus on the effects rather than the cause in this case. Ensuring you understand whether the question is asking you to look at the causes or effects/impacts is essential for exam success.

Examiner Tip


Question 6 (c)Two correct measures explained in context with either two evaluative comments per measure, or one evaluation point well developed was required here. Weaker responses tended to either only cover one measure, provide one relevant measure and one non-relevant measure or did not provide evaluation. Minimum price schemes were used effectively as methods to restrict monopsony power with many candidates developing their arguments as to how this would benefit suppliers and evaluating why such schemes effectiveness may be limited. Additionally, regulatory measures usually linked to fines or mergers of suppliers or de-mergers/blocked mergers of supermarkets were well argued. A common error was to provide a subsidy – this was often a confused response lacking in relevance.


This answer achieves 8/8 marks.

8 mark questions are points based – up to EV2 for one point of evaluation is awardable – but the remaining six marks are split across the two measures i.e. 1K+1AP+1AN. The candidate includes two relevant measures which are well applied, analysed and evaluated; and as such earns the maximum mark of 8/8.

Examiner Comments

A well-structured response creates a suitable framework to earn top marks.

Examiner Tip


Question 6 (d)This question proved to be a challenge. Information gaps were not well explained and irrational behaviour beyond habitual shopping habits was badly explained. A lack of understanding of irrational behaviour meant that many candidates failed to secure high marks as did an over-reliance on aspects of the text without explaining or considering whether these were truly examples of information gaps. Many candidates picked up marks by exploring other causes of food waste that they were more able to explain like substandard packaging. They also picked up marks for considering the future with better technology and forecasting.



This candidate displays an excellent ability to link knowledge and understanding in context using relevant and focused examples which are fully integrated and as a result achieved a top Level 3 KAA award (6/6). Other candidates were stronger on theory than this but both approaches apply their economic ideas to the broad elements of the question. The evaluation is also to a top level in displaying relevant reasoning and appropriate reference to context as well as being critical of the evidence.

Examiner Comments

Try to fully integrate theory and context in both your KAA and evaluation to guarantee top level marks.

Examiner Tip


Question 6 (e)This question clearly differentiated between the candidate that understood the theoretical problems of mergers in context, with a coherent chain of reasoning and responses which were theoretically light. Full marks were not always accessed when the answer did not consider carefully the context of the question and data available. Candidates who focused on the question and provided ‘problems for Sainsbury’s and Morrisons’ rather than to other agents achieved much higher scores and were generally able to develop these using the context and wider knowledge of issues of oligopolistic mergers effectively. The mean mark was 8.65.


Use this as a model for your writing, along with other high scoring responses. Carefully unpick where the economic ideas are concisely linked together in context with both the problems and their evaluation.

Examiner Tip


This candidate achieves top level KAA and Evaluation. The further chains of reasoning are very impressive in looking at the two problems in context with concise use of theory and likewise with the linked evaluation.

Examiner Comments


Question 7Responses generally focused on a number of relevant microeconomic issues effectively and broke down the various impacts on different agents to provide effective analysis of a range of microeconomic effects. High scoring responses were well structured and at times provided clear evidence of planning. They made effective use of Theme 1 and Theme 3 theory, going beyond the mostly Theme 1 theory of lower scoring candidates. Diagrammatic analysis is not required but when done well was accurate, well labelled and well explained with a solid chain of reasoning. Candidates at the top end used supply and demand diagrams to consider the tax burden or welfare effects and many candidates used theory of the firm diagrams eloquently to explore the cost and revenue implications. In addition candidates who recognised a negative consumption externality and were able to provide a correct diagram provided well developed responses.



Whilst still marked as a level based response the analysis marks are much more heavily weighted in the essays compared to other questions. The candidates diagram is to a Level 3+ standard with the shift in tax being ‘ad valorem’ and careful labelling which is then integrated in context to achieve Level 4. The welfare analysis of the tax revenue raised is also impressive. They have also included a number of good evaluative points, including unintended consequences, for example. Overall this answer secures Level 4 KAA (15 marks) and Level 3 evaluation (7 marks).

Examiner Comments

To achieve Level 4 analysis candidates need to offer a depth of thinking which is best secured with two, or three, major points rather than attempting to do so through a wide range of points.

Examiner Tip


Question 8Diagrams for this were clear as was the concept but beyond the argument that shareholders expect MC=MR because they want dividends and managers want MR=0 because performance bonuses are often linked to turnover, the candidates struggled to think of reasons. Stronger candidates examined the idea that MR=MC was quite hard to calculate and the shareholders wouldn’t really have a clue given their proximity to the daily operation and inside workings of a business. Effective evaluation often went on to be critical of revenue maximisation along the lines indicated in the mark scheme as well as the principal-agent problem. There was clear differentiation in approach from confused diagrams to fully labelled and annotated diagrams. Candidates struggled to develop chains of reasoning which explained why one objective might be more suitable for firms in a specific industry. The lack of effective application to an industry led to a number of responses failing to develop arguments and to build on a technical understanding of the conditions for the two different objectives.


Remember to ensure you answer the question in context i.e. an industry of your choice.

Examiner Tip



This answer focuses primarily on the theoretical arguments to an advanced level. However there needs to be a consistent focus on an industry of choice and this answer was too focussed on ‘Walmart’ in early parts and then later on it focuses on ‘supermarkets’ but not consistently; hence top level 3 KAA (12) plus L3e (8e). An industry focus is key to answering this question.

Examiner Comments

Remember to ensure you answer the question in context i.e. an industry of your choice.

Examiner Tip

2017 edexcel economics paper 1 microeconomics paper · 2017 edexcel economics paper 1...

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